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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Williamsburg 8, Us 8, Keith Boykin 8, John Mackey 6, Matt Welch 6, S&p 5, Obama 5, Clinton 4, Aflac 3, Obama Administration 3, Geico 3, Matt 3, Virginia 3, Algeria 3, Mark Simone 3, Keith 3, Jon Huntsman 2, Peter Brooks 2, Romney 2, Spiriva 2,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    January 18, 2013
    7:00 - 8:00pm EST  

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♪ ♪ [ male announcer ] don't just reject convention. drown it out. introducing the all-new 2013 lexus ls f sport. an entirely new pursuit. all right. on tuesday morning, we're going to get a test of my hope /no hope thesis and it'll be from caterpillar. because after the bell caterpillar announced a big misconduct problem in china that will cause a huge impairment charge. if you see this stock doesn't come down, well, it's kind of like boeing with the lithium batteries that doesn't go down. then we know perhaps i, a bull,
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am perhaps too bearish. there's always a bull market somewhere, i promise to try to find it for you right here on "mad money." i'm jim cramer, and i will see you tuesday! good evening, everyone, i'm larry kudlow. let me begin tonight with a simple economic message to my republican friends. if you don't communicate and implement a program of deep spending cuts. . including across the board spending sequester, you risk losing control of the house in the 2014 election. why? well, i know the democrats won't cut spending either, but i also know the conservative base of the republican party will stay home or walk away. and, frankly, coming out of your retreat in williamsburg, virginia, i didn't hear the key message of deep spending cuts, not the message that deep spending cuts will help grow the economy and help create jobs. . . but i did hear no budget, no pay, aimed at democratic
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senators but then deemed unconstitutional, and an extension of the debt ceiling for about three months which is okay. . it doesn't really go to the heart of the matter. we're going to have a report on this whole story in just a moment. . meanwhile, better news, the stock rally continues up 54 points on the dow, 161 points for the week. get this, a 35% gain in the broad s&p 500. . just since early october 2011. that's right. it's like a stealth rally. it keeps on moving. we'll talk to a leading investment ceo a bit later in the program. . first up, in williamsburg, virginia, today, house republicans have agreed to take up the plan next week to extend the debt ceiling with some conditions. i think that's boring and uninspiring. let's go to the source of this cnbc contributor robert costa. . .
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i think it's boring, boring, boring. you tell why this is a great. are not attached to this proposal. very three months. let me say this, from all my reporting down there in eastern virginia default on the debt. so what they're trying to do is just punt on the debt ceiling and focus the spending cut fight on the upcoming continuing resolution to fund the government. >> i didn't hear any focus on spending cuts. and i didn't hear any focus on the sequester. and i'm looking at rasmussen polls that show me that the public wants across-the-board spending cuts. and you and i both know the republican base is hungry for that after getting hosed in that
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high tax bill. >> i think you're a bit off, larry, respectfully in that republicans i think want to have these spending cuts. but they're picking a strategic battle. and you could be right in saying they're picking the wrong battle. but they don't want to have the spending battle on the debt limit. they want to have it on the cr, that continuing resolution to fund the government for the rest of the year. >> well, i am 100% -- look, i do not want to mess with the debt ceiling. i don't want to mess with that. that's a domestic and international global meltdown. so to that extent i agree. i just didn't hear the rest of the story laid out very coherently regarding spending. i didn't hear it from paul ryan, and i didn't hear it from the leaders. and that's the part i don't get. the debt ceiling, three months, whatever. the continuing resolution, that's a little bit in the weeds. but all right. fine. you can work with that. but i didn't hear them say what that was going to mean for spending, either. >> that's a great point, larry. they're not articulating spending cuts enough. but when you have someone like paul ryan at this retreat in williamsburg leading the effort
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behind the scenes for the short-term extension, he's telling members, especially the skeptical back benchers, that when that cr comes up in a couple months, when that sequester fight comes up and defense cuts in a couple months, house republicans will push for the spending cuts but they don't want to lose the pr bat toll a president who's very adept at pointing his finger at republicans and saying they want to cause default. >> okay. i think they're losing the pr battle anyway. >> perhaps they are. >> i mean, i don't know. i know obama's very fassel, but i also know democrats will never cut spending in my lifetime. robert costa, welcome back from the wilds of williamsburg. now, i want to turn to my panel and say i don't really think the gop got the job done in williamsburg. that's just my view. here's cnbc contributor keith boykin. he's a former clinton white house aide. we have mark simone, w.o.r. radio talk show host, and matt welch, reason magazine editor in chief. mark simone, do you think the republicans are burning up the track here? what is their message? >> they have no message. now, let me correct one thing you said. the democrats will never cut
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spending. wait till hagel gets in place there at the defense department. you're going to see some spending cuts. >> he's a republican. >> i stand corrected. >> he's a republican in name only. >> that's wonderful. >> the problem is there's no ronald reagan, there's no bill clinton, there's nobody to talk. you know, the average person thinks that we suddenly had a revenue shortfall and that's why we're running a deficit. they have no idea that we've got tons of revenue but that spending is at a ridiculous level now. 25% of gdp. it needs to get down to 17% of gdp. nobody has explained this to the public properly or convincingly. >> aunder your favorite presidet the debt has gone from roughly 10 trillion to 16 trillion. we just had the treasury numbers out yesterday. in fact, in the last year it went up again 1.3 trillion. now, this leaves an opening for the republicans. but i don't think they're smart enough to take it. and i agree with costa. actually, the president, who is a very clever political guy, they're letting him get off because he doesn't want to cut 13e7bding. mark is right.
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except smash the defense department. the rest of it, the entitlements, the discretionary, the little entitlements, he doesn't want to touch them. >> i don't know. was there a question in there? >> i think somewhere. somewhere there's a question. >> i don't know what to say. i guess spending is not what the democrats run on. i see this repeatedly. this is the republican party platform. when the democrats propose spending, the republicans attack them for it. i mention always the $716 billion in medicare savings or spending cuts the president proposed last year. mitt romney attacked him for that. the republicans attacked him on that. the republicans can't even agree themselves on their spending cuts. remember the original ryan plan, newt gingrich called it right-wing social engineering. so when john boehner comes together with his plan b in december, there's no unanimity or consensus in the republican party about that. i think the gop has to get its own house in order. >> they're all screwed up. that's what i'm saying. >> but they're the ones who talk about spending cuts -- >> base is going to -- >> you know the base of the republican party better than i do but i think the republican base doesn't have anywhere to go. >> they go home to sleep.
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they can watch tv. they can watch a sporting event. they can have a couple of beers. believe me. you're seeing the base. you ever see what they look like? i'm sorry. >> you said that. not me. >> i didn't say that. matt welch, you're kind of a neutral observer in this whole story. >> kind of. >> let me get your take on this. do you think the gop's getting the message out? >> i think it was shrewd politically what they did today. >> okay. >> they put democrats on the defensive. they shined a light on the fact they haven't passed a budget in 1,360 days and said hey if you want to be -- we don't want to be the irresponsible budgetary party anymore because everyone's accusing them of being irresponsible for threatening a government shutdown. so they're saying okay, pass a budget. all right? that is a basic level, a minimal level of responsibility that democrats and the senate specifically have not taken now since 2009. and i think people will respond to that and say that does actually make sense, pass a budget. >> passing a budget or not doesn't threaten the default of the united states government. it doesn't threaten the ability
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to operate the government. those are fundamentally different issues. i don't think the american people care whether the senate has passed a budget because it doesn't have any impact on the government's operations. >> it does force, if the senate ever passes a budget, it does force them to come out and say this is what our values system says we want to spend money on right now. if they want to increase spending that's very politically unpopular and they're going to have to own that. but to your point and to your point and everybody's point, republicans don't ever want to say they want to cut anything specifically and they're kicking that down the road another three months at least. >> can i just say, i could buy into your opening salvo that the republicans are being clever in some respects. no government shutdown. no debt ceiling default. okay. but mark, the problem i have is they refuse to talk about the across-the-board automatic spending cuts in the so-called sequester. it's about 80, $100 billion this year and $1.2 trillion over ten years. to me that is their biggest mistake. that is already the law. the democrats are trying to
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hedge on it. the president has already said it's not going to happen. this is where the republicans should go. and they won't go there. and that's why i doubt their bona fides on spending. >> you have to first of all as i said before get across that spending levels are stoo high. keith, you would agree with that, right? >> no. >> see what i mean? they're too high. >> perfect. right. >> you think this level is appropriate. 25% gdp. >> you're talking about gdp to spending -- >> yeah. >> yeah, that is too high. but that's not because we're spending too much. it's because our revenues aren't -- the reason our revenues is r. in decline is we're in a very weak recovery. we got out of the worst resgs -- >> whose fault is that? >> there was a president who came in before us. i don't know -- >> you can't keep blaming bush. you're in your second term. >> bill clinton. >> he doubled the national debt. >> his last budget was $1.8 trillion. obamas first fully owned budget was $3.8 trillion. 1.8, 3.8. >> guess what happened during
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that time? we had a war in iraq. we had a war in afghanistan. we had a prescription drug program. we had a hurricane katrina. >> i'm not republican. i agree with you. >> all this happened under bush's watch. they didn't approve one new dollar in revenue to pay for any of this. >> i hate to break it to you, if you're going to blame the last administration, that was president obama the last four years. >> no, no, no. remember -- >> you're going back two terms? >> remember 2008? remember what happened september 2008? that was bush's -- >> his second term was fabulous on spending. working with the republican congress. clinton. they got the spending share of the economy down to 18%. now, you are right. growth is holding back revenues p but i think that's because president obama's taxes and regulations and obama care. >> it just started a few days ago. >> if we could go back -- that's why it's such a lousy recovery. if we could go back to anything close to those clinton heflz. hello, if we could go back to 2007, before the crisis, we would be in great shape. i've got to get out of here. keith boykin, matt simone, matt
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welch. plenty more to do with the rest of the show. now, i have a serious question, a very serious question. at least one american hostage is now dead in algeria. and there are other americans still held hostage. so where are the marines? where are the special forces to rescue them and show some american strength? we're going to tackle that later. then later in the show, guess how long it's been since president obama's much-heralded jobs council has even had a meeting, keith boykin. try a year ago. a year. it doesn't sound like the president is really interested in economic growth at all. and that's why those revenues are so low. and please don't forget, free market capitalism is the best path to prosperity. economic freedom equals growth on "kudlow." we'll be right back. look, if you have copd like me,
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developing news tonight regarding the ongoing hostage situation in algeria. u.s. officials say one american has been killed and two others have escaped. but they also confirm that more americans are among those still being held hostage by the islamist militants who stormed this natural gas facility three days ago. secretary of state clinton says the situation remains fluid and
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the hostages are still in danger. she was also quick to not repeat the mistakes of benghazi. please take a listen. >> let's not forget, this is an act of terror. the perpetrators are the terrorists. they are the ones who have assaulted this facility, have taken hostage algerians and others from around the world who were going about their daily business, and this is absolutely essential that while we work to resolve this particular terrible situation we continue to broaden and deepen our counterterrorism cooperation. >> all right. joining me now, former deputy assistant secretary of defense and heritage foundation senior fellow peter brooks. all right, peter, secretary clinton's got it right. it is a terror situation. but regarding benghazi or anything else, what exactly are we going to do about this? there are americans presumablpr the news reports suggest, there are americans still being held
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hostage. where are the marines? where are the special forces? where is the united states right now? >> well, i can't speak for the obama administration. you know that, larry. and i certainly hope that they're gathering the intelligence that they need to perhaps undertake a rescue operation of these individuals, the americans and others. but this is -- a lot of this is symptomatic of the obama administration's counterterrorism policy in that part of the world. larry, has anybody paid a price yet for the benghazi terrorist attacks? as ansar al sharia, al qaeda in the islamic ma greb, has anybody been arrested? not that i'm aware of. one was arrested, he's been let go. have there been any military strikes? now, i'm hoping that our intelligence forces, our military are planning operations against these people and they're going to take action at a propitious time whether you're talking about the situation in libya or what's going on in algeria -- >> i'm just going to tell you, if americans are being held
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captive by terrorists or anybody else, pirates, terrorists, whoever, this country should be strong enough to send in special forces, marines, i don't know what, having drones above us. we should be storming that place. i don't care whose land and sovereignty it is. we should be taking action. there are americans -- >> i agree with you. >> -- who have been captured. we should be doing something. >> but just a second. i agree with you. but just a second. first of all, the algerians took an action that caused a lot of trouble and probably some deaths. and they didn't coordinate that. it shows the lack of diplomatic influence we should have had with the algerians. so we have a bad situation. we don't want to make it worse. and i'm not trying to defend the obama administration here, but i want to do it right. i don't just want to do it. i want to do it right. because you know what? these hostage situations are very dangerous and you want to make sure you've got this big plant, where are the hostages being held? i mean we have to take some sort of action, but we want to get it right because lives are on the line. >> all right, keith boykin,
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you're shaking your head on this. do you agree with peter brooks? do you think the clinton administration is -- i'm sorry, the clinton. the obama administration is in fact planning something now so we can do it better and unwind this horrible situation? >> i think they have to be. they have to be coordinating with the algerian government. they have to be figuring out what their options are, special forces options. but you also have to remember, they took out the somali pirates not once but twice and they took out osama bin laden. they've -- >> that's why i want them to take this thing out. go. >> but they didn't just jump in willy-nilly whenever there was a tragedy -- >> well, what are you waiting for? >> well, i assume like he said they want to get it right, make sure you have all the facts -- >> 24 hours. these guys are so smart. 24 hours. i saw "zero dark thirty." i saw that. >> the algerians walked in and they created this mess and now more people are killed. >> they really did. peter, let me get back to you. now i want to get your opinion on this latest thing. so they want the blind sheik, the terrorists, whoever these guys are, the terrorists want to swap the blind sheik for
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american capittives. you don't truly believe our government would agree to that, do you? >> i certainly hope not. i guess i believe in the reagan policy of not negotiating with terrorists. and we've heard this before. we've heard this out of egypt. you know, but the problem here, larry, is that i think wey dithered on mali. this organization, al qaeda in the islamic mag reb and its affiliates beat the malian army almost a year ago. this happened last march and here we are in january, they own half a country the size of texas and now we see it spilling over in other places -- >> i give the credit some credicredifrench some credit. maybe the french will storm this natural gas facility. i give the french some credit for fighting. i want us to come in and help the french out. the basic point, peter, as you know better than i, al qaeda and its cousins and its terrorist cousins are alive and well and operating all over north africa.
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i'll give you the last word. that's what they're doing. >> if we're not careful here, larry, this part of the world will become the next afghanistan pre-9/11. >> peter brookes, heritage, thank you very much. >> thanks for having me. >> i always thought jobs were the most important priority for the white house. that was my thought. so my question is why hasn't president obamas ceo jobs council even had a meeting for an entire year? he didn't even call keith boykin to help him out. well, maybe the president really doesn't care about economic growth and he doesn't care about some of the panel's very excellent conditions and recommendations. we're going to detain thbate tht after this brief message. ♪
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[ male announcer ] over a third of a day's fiber. excuse me, sir i'm gonna have to ask you to power down your little word game. i think your friends will understand. oh no, it's actually my geico app...see? ...i just uh paid my bill. did you really? from the plane? yeah, i can manage my policy, get roadside assistance, pretty much access geico 24/7. sounds a little too good to be true sir. i'll believe that when pigs fly.
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ok, did she seriously just say that? geico. just click away with our free mobile app. as of yesterday the president's so-called jobs council has not met for an entire year. and if it was worth creating the panel and getting the ceo buddies to sit on it, why not listen to some of their recommendations very good? our panel's back, keith boykin, matt simone, and matt welch. what do you make of this, mark? the ceos, much fanfare, never met with them. >> he's got a real blind spot about the biggest thing going on in this country. people are afraid. everybody's afraid about their job, about losing the job, about the wole company closing, the company being merged. everywhere you go. top to bottom, many organizations, nobody feels safe in their job. it's a psychological gloom over everybody. he never speaks about this.
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he never deals with this. he never talks about it. he was brilliant on newtown, reassuring people. why isn't he out there every day reassuring people he's going to do something about their job security, do something about this economy? where is he on this? >> matt, what's your take on this? because i know you're not partisan in these things. and some of these recommendations, i read the thing, they wanted business tax reform, they wanted spending reform and lower deficits, they wanted deregulation, there's a lot of really good pro-growth elements to this package, jeff immelt and company, and he's not done a thing. why do you think that is? >> you know, i don't weep when ceos and the president don't meet. i think we have new crony capitalism in this country as this stands and ge and jeff immelt are right there in the mix of it all. what we need are good jobs policies, not jobs carve-outs, not special -- more sba loans to these -- >> but these guys had broad -- they wanted corporate tax reform. i agree about crony capitalism.
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>> this stuff is -- it's a reason to have a photo op at the white house saying we are listening to your concerns, ceos of the country -- >> but never meant it. he never really meant it. obama. i'm directly going at the president -- >> he doesn't have an interest in deregulation. he snipped a couple of regulations and then added hurnds, literally hundreds of economically significant regulations during his term, and that's just only going to increase going forward. there is no strategy going forward to any kind of corporate tax reform. he talks about it but it's not going anywhere. there's no -- >> how can you -- what's your defense on this? >> i'm at a loss for words. >> yes. i would imagine so. >> i don't know, about the jobs council i don't think it's a huge deal that it hasn't met because they've already made recommendations. and the question is when are those recommendations ever going to see the light of day in congress. he has an american jobs act he put out. it hasn't gone anywhere in the republican house. i think those are some of the proposals that came out of the jobs council.
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but in terms of what mark said i think he's exactly right. the president does need to be talking about jobs more. i felt that the whole six-week period after the election until the end of the year when he talked about the fiscal cliff and the debt -- and the debate with the republicans was a wasted opportunity. we had an election that was just about jobs. i think the president needs to get back to that issue if he hopes to realign with the american people. >> by the way, i would just add, we've got to get out of this segment, but i haven't heard a republican message on jobs and growth. that's part of my criticism today. i believe lower spending, which keeps more money in the private sector and less money in the government sector, is pro growth. milton friedman said this, nobel prize winner, frederic haye can k, nobel prize winner. buchanan said, this another nobel prize winner. shrinking the government is pro growth in the economic model i subscribe to. why aren't the republicans talking about that? this is one of their problems. all right. you gentlemen stick around. keith, matt, and mark. now, we're going to tackle gop rebranding. this is going to be good. rebranding efforts.
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and minority reach-out with a senior republican who was at 9 williamsburg conference. let's hear his story.
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welcome back to "the kudlow report." in this half hour, the stock rally is still riding high. that's right. we closed at another five-year high for the dow today. but not enough americans seem to be enjoying this ride. they're sort of staying out of stocks and missing this big run-up. and whole foods ceo john mackey is speaking out again about obama care and many other issues. remember, he is probably the most outspoken business leader against obama care, and he's going to join me later in the half hour. first up, just days after president obama is sworn in for a second term next week, republican leaders will gather in charlotte to plot their party's path forward. goal number one, apparently, attracting more mrntd and female voters. now, coming out of the williamsburg, virginia conference where a little of this went on we bring in oregon congressman greg walden. he's chair of the gop congressional committee. that's a committee charged with helping elect republicans to the house.
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greg, thank you very much for coming on. we appreciate it. and we picked up some of your media coverage today. in short, what strategy are you looking at right now? >> well, first of all, larry, let me say that i'm a republican, i'm in leadership, and i believe that a smaller, less costly, less intrusive federal government will bring about a healthier economy. so now you've heard from one republican at least -- >> thank heavens. >> -- who agrees with you -- >> you should have been out there with the lead communication -- stthank you, s. >> i'm here tonight and i'm glad to be with you. and we're going to drive that message home. because it's so unfair to people in this economy to have an unhealthy economy when it could be so much better. that applies across the board to all hard-working american taxpayers and those who want jobs so they won't have to work two or three of them to make ends meet. used to be you could have one job and pay the bills and now it seems like families struggle so hard to make ends meet. >> so let me try to connect a dot or two here. you tell me if i'm wrong. you're saying essentially a
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fiscally restrained prudent budget cutting and economic growth plan, presumably tax reform that that will help you, help the gop bring in more hispanics, more asians, more african-americans, more women. is that a piece of it? >> that is a big piece of it. because if we can deliver and show people of -- all americans and all future americans that we want a healthy economy that gives them a healthy opportunity to move forward and come up the economic scale for them and their families, think of the security that means to families. now, look, we know too we've got to do a better job communicating and doing outreach to hispanic communities. that's why i've asked jamie herrera butler, the youngest woman in congress, a republican from washington state, who is also hispanic, who lead our coalition's effort at the republican national congressional committee, you can go and see our site. help and help us understand. we have cuban members, latinos.
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we have others who can absolutely help us understand -- >> let me go there. this is a very interesting point. there's a column written someplace, cnn.com, i'm not sure, by my friend john avlon. and he's a moderate to sort of slightly left of center guy. but he says this. he says the gop at the state level has really more diversification than the democrats do. and he cites, for example, hispanic governors, brian sandoval in nevada, suzanne martinez of new mexico. indian american governor bobby jindal, who may run for president. okay? he also talks about in the senate a new star, ted cruz, hispanic from texas. and of course marco rubio, hispanic from florida. we have african-american senator tim scott, just appointed. 24s pretty good stuff. >> it is. >> the question is if you did so well on the diversity issues at the state level for these gubernatorial and senate races why can't you get it done at the presidential level? >> well, the presidential level is a little different thing that i'm in charge of at the house level, but we had 21 women
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candidates and incumbents, all of whom the democrats targeted and replaced with men. you know, we have done a pretty good job, but not as good as we can do at recruitment. we lost african-american candidates and incumbents like allen west and mia love out in utah. so we've got our work to do, but we've had some terrific candidates. we've got terrific members now. we need to listen and learn and do a better job of communicating to get at the issues you're talking about, larry, which is what all americans want. it's a better economy. how do you have a president, as you talked about, that has a jobs council that only meets once? >> i know. it's xwroerd. >> come on. >> many thanks. congressman greg walden. mr. walden, you get tonight's nobel prize for limited government, spending cuts and economic growth. you get the prize. it's a great pleasure to have you back. >> thank you very much. >> we're going to ask this question. will the gop be able to effectively rebrand itself? back with us is keith boykin, former clinton white house aide, mark simone, w.o.r. radio talk show host, and matt welch,
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"reason" magazine editor in chief. what do you think, mark simone? first of all, is the republican brand really in bad shape? >> yeah, it's in bad shape. the democrats are in bad shape, though, because they are flying so high right now. they are apple at 700. they'd better worry. these things go in cycles. it always goes in cycles. i'll tell you the first thing the republicans should do, get out of the abortion business. just take no position on it. it's a states issue. it's a -- let the church worry about it. let the states worry about it. just never take a position on it -- >> kelly ann conway, a friend of ours, very brilliant political consultant, apparently told a huge meeting of house leaders today in williamsburg about the word rape, which was so devastating to several republicans running for the senate. two senate seats were lost because she said, she said that is a four-letter word. it should not be discussed. now, that to me strikes me as a very common -- >> a number of issues they have with women all stem from this abortion business. just get out of that business. it comes -- >> and i'm a pro-life guy. what do i do?
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i'm a pro-life guy. i don't want the republican party to be the pro-abortion party. >> they're not the pro blorgs. they have no position. they stay away from it. it's a states' issue. let the states decide that. >> fair enough. do you buy into that? >> i think it's smart politics. i don't know if i agree with it substantively. the republican party is losing women, and that's a majority of the population but they're also losing latino and mashzn americans, the two fastest growing segments of the population. romney lost them 70% to obama. >> brute'll. >> they lost the african-american. >> brutal. >> there's not aenough rich white guys to support the republican party. >> there aren't even enough unrich -- romney got the white vote. they did very well. friends of mine said if a republican gets 60% of the white vote he or she will win. he got that and he lost. he lost because nobody in the latino community voted for him, nobody in the asian community voted for him, and obama had the african-americans locked up. now, let me ask you from your perspective, is the economic growth message sufficient or what else does the gop need to
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do? >> that's the thing they need to do most, is present an actual alternative philosophy and practical governing idea. people would go there, even people who aren't necessarily republicans themselves. they would prefer to have a coherent alternative that says we want to cut government, not expand it, or keep it at the same level, and we actually believe in federalism in areas where the government doesn't have business getting into. and that could be things like prosecuting the drug war, recognizing gay marriage, all these types of things. there is the popular perception -- >> as a state issue. >> as a state issue. >> federalism. >> there is a popular perception that the republican party is this collection of white people telling people who aren't white what to do with their lives. this is not very good. >> i agree. >> the key -- but a lot of that is about immigration. the republican party has turned much more stringent -- >> this is -- >> -- about immigration in the -- >> the night in the debate that mitt romney talked about self-deportation was to me staggering. and look, i have always been i hope enlightened about immigration policies because i think the republican party has
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not been very enlightened and i think there's got to be a way to deal with it. they need a policy change, not just rhetoric, mark. they need a policy change. >> the democrats have the world's dumbest position on immigration, which is we'll look the other way, you sneak, in you hide in the shadows. that's a ridiculous position. >> and the labor unions are very harsh on immigration. >> republicans should just say we'll take control of the situation, bring some order to this, we'll seal the borders, we'll bring you in but in an orderly fashion -- >> give you work permits. >> yeah. >> give you work permits. pay your taxes, right? english, american history. path to citizenship. what's so hard about that? that's not amnesty. it can take a long time to get that done. >> immigration's not the only issue that latinos care about. i think that the republican party has to do something about its tone. the candidates' tone. i mean, mitt romney didn't believe half of the stuff he was saying during the campaign, and i think he's more like a jon huntsman. jon huntsman had the right tone, but unfortunately it didn't work the republican party. but he could have actually beaten barack obama. i think chris christie, even
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though he can be sort of strident in some ways he has a much better tone going into 2016 because he's willing to work with democrats, he's willing to criticize democrats. the republicans have to sound reasonable in order to win elections, especially the presidential election, at the presidential level, and they haven't done that in recent years. >> what about the -- let me go to the asians for a minute. this is a huge growing population. supposedly great business people, free market people, free enterprise people. republicans got slammed in the asian -- >> i don't know why. >> it was just as bad as hispanics. is it because republicans don't go there, they don't talk to asians, they don't go to their meetings? it's it's a matter of language? it's a matter of communication? >> i have no idea why because asians come here legally, there's no flob, they're usually very hard-working, don't depend on government entitlements. that's a mystery to me on that one. >> why do you think that is, that asians are going democratic? >> i think partar of it is the perception that the republicans is a rich white club and by
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definition that excludes aother people. but also let's say this idea is true, this stereotype of asians as being super entrepreneurial and pro business is true. why would you vote republican? what's the evidence there that republicans are the party of actually -- >> you mean i'm idealizing their free enterprise position which doesn't really exist? well, that's why i keep slamming every night. if i have to slam. i've got to go. keith, matt, and mark, hang on. now, let's talk some stock market rally here. this is a great story. the dow and the s&p closed at five-year highs today. the rally continues. but here's the question. why are a few people enjoying the ride, why are so few people talking about it? more potential investors seem to be missing the boat than ever before. we look at the rodney dangerfield rally. it gets no respect. next up on "the kudlow report." ♪ if loving you is wrong
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stocks had another solid week with the dow up 161 points, closed at 13,650. nasdaq up 9. the s&p 500 up 14 to close at 1,486. energy, industrials, and consumer cyclicals led the way, and did you know in this so-called stealth rally that no one talks much about the broad s&p 500 has gained 35% just
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since early october 2011. a little over a year ago. up 35%. so where's the love for stocks? why isn't the bull run getting any real respect? here's our friend ron kashevski, president and ceo of stifel nicolaus. good to see you. you know, it has been a good run. and it's funny, it doesn't seem to get respect, and you don't see it in the mutual fund flows and you don't sort of hear it in the chatter. why is that? >> well, first of all, larry, last week $22 billion flowed into equities. the largest inflow since 1992. so you're beginning to see it. but the reason you don't see it is simply we don't realize the bubble we're in. we're in a bond bubble. bonds are overvalued, equities are undervalues. and people don't expect this market because they don't realize that this market can rally and rally significantly with tepid economic growth. because we're not going to slide into a global deflationary
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spiral. that's what's off the table today, larry. >> all the central banks are putting out liquidity, you're exactly right on that. yes, there is. we did report that, by the way. lipper reports that we had some good mutual fund flows. but i would think, ron, i want to go on to other topics, but the level of profits is so high and the level of interest rates so low that i don't know why the market isn't even much stronger given these factors. >> well, i think it is going to be much stronger, larry, but people are looking for the traditional signs of a bull market. gdp growth of 4%. jobs being added left and right. and if you're looking for, that you're going to miss a rally which is simply going to bring the valuation of equities much closer to where they should be relative to bonds. and people are going to sit on the sidelines and completely miss this rally. this rally is not over. >> let me be a little more specific. there's a big story in the paper today that many of the regional banks, pnc, fifth third, bb & t
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to name a few, are outperforming some of the big wall street banks like the bank of america and citi. let me ask you something. from your perspective, you're in the financial business, financial services business. first of all, is it true? are the regionals a good investment? and second of all, just more generically, is the financial services industry a good investment? >> well, i think the financial services is a good investment. it's been pummeled, whether it be because of the value of homes, the regulatory, the political, you name it, the financials have been pummeled. and it's a good time to invest in financials. i've been saying that for a while. but frankly, the regional banks are outperforming the large banks because what we found was that the large banks were merely -- they weren't more profitable, they were just more levered. and these banks have to delever and raise common equity. and it's a tough row to hoe while the smaller banks are seeing good loan demand and they
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have solid business models. i think these small regional banks are great investments. >> there is a point of view that's up on the cnbc.com website that now is a good time to get out of the banks and go into industrials, probably because the world economy may be better in the next year or two. we had a pretty good report. latest quarter from china 7.9%. you know europe's in a recession, the u.s. is chugging along. but probably the world economy beats expectations, time to sell off financials and buy industrials. do you have a thought on that? >> sure, i do. i don't think they're mutually exclusive, larry. tell me the world economy is going to get better and industrials are going to perform yet you're going to sell the industry that's going to finance all of that and an industry that's been pummeled because there has not been any growth in the world makes no sense to me. i'm not saying thanltdss aren't an investment, but i wouldn't sell financials in the face of improving world economic -- that makes no sense to me.
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>> would you just buy the s&p index? >> would i buy the -- absolutely. i'd buy the index. but i'm going to tell you something, larry. the other thing that's going to happen, the markets have a way of repeating themselves, and history does, the trend toward passive management, all of the etfs, active managers are going to outperform the passive. when the markets get better you are not going to see everything correlated. stock picking's going to matter again. i would be in equities. i would pick quality equities. and they're going to outperform bonds. >> i've got to run. great stuff. thank you. it's wonderful to see you. it's been way too long. now, folks, he's the free market libertarian ceo of the successful supermarket chain every organic left-leaning american loves. that being mr. john mackey. and he's making news again with his opposition to obama care. he's about to join us next. malu turn an entrepreneur's dream... ♪
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outspoken whole foods ceo john mackey is no stranger to controversy. remember his 2009 "wall street journal" op-ed calling for obama care repeal. well, he's back at it. this time he said obama care is worse than socialism, it might even be fascism. let's welcome an old friend to the show. whole foods markets co-ceo and co-founder john mackey. and he's the author of the new book "conscious capitalism: liberating the heroic spirit of business."
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fellow free market man john mackey, welcome back to the show. >> thank you. good to be here. >> i don't really care that much, but you backed off the term fascism. can you just tell our viewers why? >> the word has got too much baggage to it. it brings up associations with germany and italy and spain back in world war ii. so people aren't able to look at that word in any kind of objective fashion. so now i'm just saying that we have government-controlled health care. that seems rather obvious. and it doesn't get people so upset. >> right. is it actually a kind of socialism light or let's say a western european-style socialism? >> no, i don't think so. because socialism, the government owns the means of production. and the means of production will still be nominally in the hands of private enterprise, but government will tell it what to, do what it can't do. so it will direct it, it will
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control it. >> what's your biggest criticism of obama care? >> it's not free enterprise capitalism. i believe in free enterprise capitalism. i believe it's lifted humanity out of poverty. it's created great progress in the last 200 years, where markets are allowed to work. it's a more innovative, robust, resilient system. i think you can have that and create a safety net to make sure that poor people are also taken care of. i think you can have the best of both worlds. and that's what i would prefer. and that's what i've written about in my book. >> that's what i was going to ask you. is that the basic message of "conscious capitalism"? >> the basic message of "conscious capitalism" is that business has the potential to have a higher purpose and that you should manage the business on behalf of all the stakeholders, create win, win, win, win philosophy. >> and let me just ask, what does it do to you? what does it do to the
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capitalist system and to whole foods? you have these government interventions, these government regulations, these government taxes and mandates and so forth. how does this system absorb that and resolve itself over these kinds of problems? >> well, it doesn't really resolve it. it -- the further you move away from freedom and allowing the markets to work and innovation to occur, then the less markets are allowed to work their magic. and so i just believe there are better alternatives. i oftentimes urge people to look at what switzerland's doing. but let's talk about conscious capitalism, larry. i think business has a very bad reputation in the world. it's often portrayed as basically all about selfishness and greed and exploitation. and yet business is the biggest value creator in the world. business creates value for its customers, for its employees, for its suppliers, for its investors, and for the larger
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communities it's part of. business is heroic. and yet the narrative about business has been hijacked by the critics and the enemies of business, who want to put it in this narrow box of basically just seeing it as selfish and greedy and only caring about money. >> well, you hear from certain people who go unnamed, you know, we have sort of fat cat bankers and we have billionaires and millionaires that are corrupting the system and that you didn't create that business. i mean, that's the kind of thing you hear. what's your reaction when you hear that stuff? >> well, business is oftentimes judged by its worst practitioners. there are some bad business people out there who are selfish and greedy, and you've got the enrons of the world and you've got the bernie madoffs. but unfortunately, business is tainted by the worst actions of a few. and we don't do the same thing with doctors. there are bad doctors out there, and there's bad politicians out there. there's bad journalists out there, larry. and yet we don't judge them by the worst of their
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practitioners. business, though, is tarred and feathered by its very worst practitioners. we want to recapture the narrative about the goodness of business, the potential for business to create value in the world. i really think that business is a great value creator and that if we can recapture the narrative and let business people begin to see themselves as heroic rather than as the bad guys the world will be a much better place. >> let me just ask you, your whole foods, john, you've had a great run, you've had a fabulous run. in fact, if i'm not mistaken, even in the past year your stock is up 16%. i just want to ask you before we leave, how is business right now? are consumers consuming? are your stores full? how do you assess the whole business economic situation? >> business is good for whole foods. it's been good our entire existence. we've seen steady growth. you know, we're a $12 billion company now. team members. so we've continued to expand and
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grow. so i think we're doing okay. >> all right. many thanks, john mackey. i appreciate it very much, sir. >> thanks, larry. >> all right. that's it for tonight's show. many thanks to the panel who have since departed for dinner. keith boykin, mark simone, and matt welch. we appreciate it very much. he is right. i think john mackey is right. free enterprise business is the best path to prosperity. i'm clair kudlow. [ male announcer ] where do you turn for legal matters? maybe you want to incorporate a business. or protect your family with a will or living trust. and you'd like the help of an attorney. at legalzoom a legal plan attorney is available in most states with every personalized document to answer questions. get started at legalzoom.com today. and now you're protected.
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